UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                 to                             

Commission File No. 1-34155

First Savings Financial Group, Inc.

(Exact name of registrant as specified in its charter)

Indiana	37-1567871
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

702 North Shore Drive, Suite 300, Jeffersonville, Indiana 47130

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code 1-812-283-0724

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered pursuant to Section 12(b) of the Act:

Common stock, $0.01 par value per share	FSFG	The NASDAQ Stock Market, LLC
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☒
Non-accelerated Filer ☐	Smaller Reporting Company ☒
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of February 2, 2023 was 6,917,921.

FIRST SAVINGS FINANCIAL GROUP, INC.

INDEX

Part I	Financial Information	Page
	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets as of December 31, 2022 and September 30, 2022 (unaudited)	3
	Condensed Consolidated Statements of Income for the three months ended December 31, 2022 and 2021 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the three months ended December 31, 2022 and 2021 (unaudited)	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended December 31, 2022 and 2021 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2022 and 2021 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8-50
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	51-55
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	56-57
	Item 4. Controls and Procedures	58
Part II	Other Information
	Item 1. Legal Proceedings	60
	Item 1A. Risk Factors	60
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	60
	Item 3. Defaults Upon Senior Securities	60
	Item 4. Mine Safety Disclosures	60
	Item 5. Other Information	61
	Item 6. Exhibits	61
Signatures		62

-2-

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31,		September 30,
(In thousands, except share and per share data)	2022		2022
ASSETS
Cash and due from banks	$	25,226	$	18,312
Interest-bearing deposits with banks		13,052		23,353
Total cash and cash equivalents		38,278		41,665
Interest-bearing time deposits		1,854		1,613
Securities available for sale, at fair value		329,163		316,517
Securities held to maturity		1,520		1,558
Loans held for sale, residential mortgage, at fair value		20,675		38,579
Loans held for sale, Small Business Administration		23,606		21,883
Loans, net of allowance for loan losses of $16,080 at December 31, 2022 and $15,360 at September 30, 2022		1,582,940		1,474,544
Federal Reserve Bank and Federal Home Loan Bank stock, at cost		21,564		20,004
Premises and equipment, net		27,297		27,100
Other real estate owned, held for sale		203		203
Accrued interest receivable:
Loans		6,346		5,379
Securities		4,090		2,953
Cash surrender value of life insurance		45,370		45,145
Goodwill		9,848		9,848
Core deposit intangibles		721		775
Residential mortgage loan servicing rights, at fair value		62,165		63,263
Nonresidential mortgage loan servicing rights		132		141
SBA loan servicing rights		3,301		3,790
Other assets		17,846		18,765
Total Assets	$	2,196,919	$	2,093,725
LIABILITIES
Deposits:
Noninterest-bearing	$	315,390	$	340,172
Interest-bearing		1,222,451		1,175,662
Total deposits		1,537,841		1,515,834
Federal Home Loan Bank borrowings		377,643		307,303
Other borrowings		95,458		88,206
Accrued interest payable		1,984		1,302
Advance payments by borrowers for taxes and insurance		695		1,207
Accrued expenses and other liabilities		23,154		28,308
Total Liabilities		2,036,775		1,942,160
STOCKHOLDERS' EQUITY
Preferred stock of $.01 par value per share; authorized 1,000,000 shares; none issued		—		—
Common stock of $.01 par value per share;authorized 20,000,000 shares; issued 7,779,271 shares (7,757,271 at September 30, 2022); outstanding 6,917,921 shares (6,970,631 shares at September 30, 2022)		78		78
Additional paid-in capital		27,347		26,770
Retained earnings - substantially restricted		163,890		161,927
Accumulated other comprehensive loss		(19,000)		(27,079)
Unearned stock compensation		(1,361)		(969)
Less treasury stock, at cost - 861,350 shares (786,640 shares at September 30, 2022)		(10,810)		(9,162)
Total Stockholders’ Equity		160,144		151,565
Total Liabilities and Stockholders’ Equity	$	2,196,919	$	2,093,725

*All share amounts have been adjusted to reflect the three-for-one stock split effective September 15, 2021.

See notes to condensed consolidated financial statements.

-3-

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended
	December 31,
(In thousands, except share and per share data)	2022		2021
INTEREST INCOME
Loans, including fees	$	20,185	$	14,002
Securities:
Taxable		955		405
Tax-exempt		1,979		1,192
Dividend income		220		149
Interest-bearing deposits with banks		144		14
Total interest income		23,483		15,762
INTEREST EXPENSE
Deposits		4,158		811
Federal Home Loan Bank borrowings		1,919		730
Other borrowings		1,145		318
Total interest expense		7,222		1,859
Net interest income		16,261		13,903
Provision for loan losses		984		526
Net interest income after provision for loan losses		15,277		13,377
NONINTEREST INCOME
Service charges on deposit accounts		558		434
ATM and interchange fees		739		679
Net unrealized gain on equity securities		14		16
Other than temporary impairment loss on securities		(28)		—
Net gain on sales of loans, Small Business Administration		775		1,636
Net gain on sales of loans, single tenant net lease		—		162
Mortgage banking income		2,496		12,744
Increase in cash surrender value of life insurance		225		254
Commission income		128		188
Real estate lease income		117		148
Income from tax credit investment		—		10
Other income		164		320
Total noninterest income		5,188		16,591
NONINTEREST EXPENSE
Compensation and benefits		10,685		17,291
Occupancy and equipment		1,860		2,113
Data processing		777		633
Advertising		418		792
Professional fees		793		1,189
FDIC insurance premiums		308		115
Other operating expenses		2,670		2,719
Total noninterest expense		17,511		24,852
Income before income taxes		2,954		5,116
Income tax expense		83		811
Net Income	$	2,871	$	4,305
Net income per share:
Basic	$	0.42	$	0.60
Diluted	$	0.41	$	0.60
Weighted average shares outstanding:
Basic		6,915,909		7,116,790
Diluted		6,972,055		7,207,210
Dividends per share	$	0.13	$	0.12

* All share and per share amounts have been adjusted to reflect the three-for-one stock split effective September 15, 2021.

See notes to condensed consolidated financial statements.

-4-

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
	December 31,
(In thousands)	2022		2021
Net Income	$	2,871	$	4,305
OTHER COMPREHENSIVE INCOME, NET OF TAX
Unrealized gains on securities available for sale:
Unrealized holding gains arising during the period		10,199		404
Income tax expense		(2,142)		(85)
Net of tax amount		8,057		319
Less: reclassification adjustment for other-than-temporary impairment loss on securities included in net income		28		—
Income tax benefit		(6)		—
Net of tax amount		22		—
Other Comprehensive Income		8,079		319
Comprehensive Income	$	10,950	$	4,624

See notes to condensed consolidated financial statements.

-5-

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

							Accumulated
							Other		Unearned
	Common		Additional		Retained		Comprehensive		Stock		Treasury
(In thousands, except share and per share data)	Stock		Paid-in Capital		Earnings		Income/(Loss)		Compensation		Stock		Total
Balances at October 1, 2021	$	78	$	25,721	$	150,185	$	8,900	$	(138)	$	(4,369)	$	180,377
Net income		—		—		4,305		—		—		—		4,305
Other comprehensive income		—		—		—		319		—		—		319
Common stock dividends - $0.12 per share		—		—		(860)		—		—		—		(860)
Restricted stock grants - 45,750 shares		—		1,222		—		—		(1,222)		—		—
Stock compensation expense		—		52		—		—		75		—		127
Purchase of 1,812 treasury shares		—		—		—		—		—		(48)		(48)
Balances at December 31, 2021	$	78	$	26,995	$	153,630	$	9,219	$	(1,285)	$	(4,417)	$	184,220
Balances at October 1, 2022	$	78	$	26,770	$	161,927	$	(27,079)	$	(969)	$	(9,162)	$	151,565
Net income		—		—		2,871		—		—		—		2,871
Other comprehensive income		—		—		—		8,079		—		—		8,079
Common stock dividends - $0.13 per share		—		—		(908)		—		—		—		(908)
Restricted stock grants - 22,000 shares		—		495		—		—		(495)		—		—
Stock compensation expense		—		82		—		—		103		—		185
Purchase of 74,710 treasury shares		—		—		—		—		—		(1,648)		(1,648)
Balances at December 31, 2022	$	78	$	27,347	$	163,890	$	(19,000)	$	(1,361)	$	(10,810)	$	160,144

* All share and per share amounts have been adjusted to reflect the three-for-one stock split effective September 15, 2021.

See notes to condensed consolidated financial statements.

-6-

PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	December 31,
(In thousands)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,871	$	4,305
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for loan losses		984		526
Depreciation and amortization		633		606
Amortization of premiums and accretion of discounts on securities, net		184		233
Amortization and accretion of fair value adjustments on loans, net		(374)		(408)
Loans originated for sale		(90,390)		(561,427)
Proceeds on sales of loans		107,337		610,090
Net realized and unrealized gain on loans held for sale		(419)		(2,224)
Capitalization of loan servicing rights		(340)		(4,850)
Net change in value of loan servicing rights		1,936		(311)
Other than temporary impairment loss on securities		28		—
Increase in cash surrender value of life insurance		(225)		(254)
Net gain on equity securities		(14)		(16)
Income from tax credit investment		—		(10)
Deferred income taxes		(1,532)		1,261
Stock compensation expense		185		127
Increase in accrued interest receivable		(2,104)		(594)
Increase (decrease) in accrued interest payable		682		(7)
Change in other assets and liabilities, net		(2,683)		(6,282)
Net Cash Provided by Operating Activities		16,759		40,765
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in interest-bearing time deposits		(490)		—
Proceeds from maturities of interest-bearing time deposits		245		245
Purchase of securities available for sale		(6,073)		(15,720)
Proceeds from maturities of securities available for sale		1,923		2,022
Proceeds from maturities of securities held to maturity		35		30
Principal collected on securities available for sale		1,525		1,435
Net increase in loans		(109,441)		(67,075)
Proceeds from redemption of Federal Reserve Bank and Federal Home Loan Bank stock		15		—
Purchase of Federal Reserve Bank and Federal Home Loan Bank stock		(1,575)		—
Proceeds from life insurance		—		575
Purchase of premises and equipment		(719)		(71)
Investment in partnership interests		(2,035)		(240)
Net Cash Used In Investing Activities		(116,590)		(78,799)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		22,007		39,455
Net increase in Federal Home Loan Bank line of credit		5,340		8,377
Proceeds from Federal Home Loan Bank advances		1,570,000		75,000
Repayment of Federal Home Loan Bank advances		(1,505,000)		(75,000)
Net increase in other borrowings		7,195		—
Net decrease in advance payments by borrowers for taxes and insurance		(512)		(871)
Taxes paid on stock award shares for employees		(30)		(48)
Purchase of treasury shares		(1,648)		—
Dividends paid on common stock		(908)		(1,715)
Net Cash Provided By Financing Activities		96,444		45,198
Net Increase (Decrease) in Cash and Cash Equivalents		(